Here are my Top 10 links from around the Internet at 10am. I'm focusing today on other reaction to the Key tax plan. Apologies for the delay. Wanted to have a good look around. Also, we had a denial of service attack that took our site down. Now rectified...for now. I welcome your additions and comments below or please send suggestions for Thursday's Top 10 at 10 to bernard.hickey@interest.co.nz

1. 'Just smile and wave boys' - Cactus Kate captures the frustration over John Key's speech in her piece 'Smile and Wave' does what he knows best. Cactus reckons I spat the dummy.

In fairness I spat the dummy years ago when I left the country so well done Bernard. I didn't agree with what you were saying necessarily, but if tax needed changes, I can't see any here that are at all substantial.

We've still got welfare for families. We've still got high taxes and excessive government spending.

We've now got yet another debate as to why GST shouldn't be hiked as it will effect low income earners. And the silliness of welfare to pay for the GST rise.

We've still got yet another government calling for a crackdown on beneficiaries. Hello, aren't you doing that already? And if GST increases they get more money? Why? Isn't that just more welfare.

Her final insult is priceless

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I am not even going to rate the speech as it was just like sex without the orgasm. Not worth bothering about.

2. 'Just a C grade' - Eric Crampton at Offsetting Behaviour gives the speech a C grade. He makes the good point that any marginal changes on GST and property will not pay for much of a cut in the top tax rates. Sigh.

The good news from Key's speech is that we're not going to get a land tax. The bad news, surprisingly, also is that we're not going to get a land tax. Or, rather, Key has given himself no room to make the tax system more efficient. I was hoping for a bigger GST hike to pay for some bigger cuts to marginal income tax rates [hopes for spending cuts are a hope too far].

Instead, we're getting a relatively small GST increase (2.5 percentage points) that will be coupled with increases to low income benefits to offset any (dubiously proven) harms to poor people - in other words, not enough to be able to do anything on marginal tax rates. I'd be surprised if whatever moves they make on tightening up rules around tax treatment of investment properties give them space to do much on marginal income tax rates either.

Eric points out rightly that Key did announce a working group to look at long term welfare dependency that might be good...or not

I wonder if he'll pay it any more attention than he's paid to either of the previously commissioned expert working groups on productivity and taxes, both of which seem consigned to the shredder. It would be foolhardy to expect any of this to amount to much given the track record. This time, I'm going to revise my expectations sufficiently downwards that I won't be disappointed again.

3. 'Moronic and laughable' - Matt Nolan at TVHE is also underwhelmed by Key's speech.

I've heard rumours they would change GST in October. Increasing GST just before Christmas, with no compensation, and coming out of a recession with elevated unemployment is what I would term moronic. As a result, it can't be ruled out

No land tax, no capital gains tax, probably some fiddling around depreciation rules (although that wasn't even pointed at in the speech), all implies that the government isn't really that serious about ensuring property is treated the same as other capital investment.

I heard today that we were going to hear about "significant changes to the tax system", something about a "step change". Other than the possibility of a slight shift from income to consumption taxes there was nothing in this speech. To be honest, it makes me laugh a little

The more I think about it, the more this speech implied a STEP BACK from the MINOR adjustments that everyone already expected. No mention of LAQC's, no mention of changes to the treatment of depreciation on property, no commitment to a GST rate change, no aims to flatten the income tax scale per see (as the higher GST would be fully compensated).

A lot of (waffly) talk about investment and minor fiddles with benefits....but which indicates how tax reform DOESN'T HAVE A PRIORITY in terms of the governments thinking. In reality this speech has shown that this government is less willing to change issues that have been illustrated with the tax system then we believed before the speech.

4. What was the point again? - Keith Ng at Public Address points out that the GST increase seems pointless, unless of course the government's plan is not to compensate the poor for the increase.

To offset the impact of the GST increase to the bottom 50%, he'd have to slash the bottom tax rate in half (to around 6.7%, to be precise), or introduce a $6000 tax-free threshold.

But either of those measures would extend to the top 50% as well, and it would cost a lot more than $1b. In fact, it would eat up most of the revenue from the GST hike and leave little to fund the reduction of the top tax rates - which was the point of the whole exercise.

Sure, it *could* happen. But a much more likely scenario is that the compensation will fall far short of the actual impact of the GST.

5. Key bottles it - David Slack, who has worked at the highest levels in the Beehive, writes at Public Address about the sense of disbelief and disappointment that Key bottled it when he had a perfect opportunity.

Here comes the man with the step change ladder. Will the government bring the boom down on property investment? Will they take advantage of the bloody big gun the Tax Working Group has conveniently wheeled all the way up to the emplacement for them? It has given them a complete rationalisation and justification for them to proffer as they step forward to regretfully but nobly fire the damn thing.

All around the village, the citizens are braced for it. We know this because the media has been full of it and the message is emphatic: the market is already taking a hit; there might be a land tax! A capital gains tax! A closing of the very big hole through which every Leonard-Cohen-going, black-polo-neck-wearing, four-rental-property-owning silver-haired baby boomer has been dragging the paperwork for their LAQC and their tax deductions.

You know for sure that a policy has real heft when the market is moving even before you announce it. So what does that nice Mr Key do with this mighty once-in-a generation opportunity for a step change? He consults the polling. He gets up there, stands alongside the mighty gun, pulls out a water pistol, squeezes it and says: "I make no apologies for making a few of you a bit wet."

Heaven forbid anyone should substantially change the 'investment' habits of a lifetime. That would be a step too far.

6. More bureaucrats - Even the left are grumpy about John Key's speech. Gordon Campbell at Scoop also pointed out the bizarreness of commissioning a Tax Working Group and then ignoring most of its findings. But Campbell rightly points to the problems inherent in trying to compensate for a GST hike.

Hell, even Peter Dunne is sceptical that the government can "˜compensate' the vulnerable for the hike in GST to 15%, without fostering exactly the sort of cumbersome and costly bureaucratic delivery mechanisms that this government claims to abhor.

7. Oh dear - GST is a real political problem for Key. The NZHerald points out here he ruled out a GST hike before the election.

In a 2008 press conference, Mr Key said raising taxes would not happen under a National Government.

"National is not going to be raising GST. National wants to cut taxes, not raise taxes."

Mr Key made the comment when asked if he could rule out a GST rise as a new Government grappled with deficits.

A National Government would borrow in the short term, he said. A tax hike would only be a consideration five years down the road, by which point economic growth would have made it unnecessary, he said.

"If we do a half decent job as a Government growing our economy, I'm confident that's not going to be happening and that's not on our agenda."

8. 'Low rates fuel bubbles' - Australia has a central banker who talks an awful lot of sense. Glenn Stevens, the Governor of the Reserve Bank of Australia, said yesterday that one way to control asset bubbles is not to keep interest rates low, Bloomberg reported. I hope Alan Bollard was there and was listening.

Efforts by policy makers to halt future asset bubbles and credit booms forming may be futile if borrowing costs are kept too low for too long, according to Australia's central bank Governor Glenn Stevens.

"If the root problem is simply that interest rates are too low, experience suggests that efforts to handle the problem by regulation aimed at constraining balance-sheet growth won't work for long," Stevens wrote in a paper he co-wrote and delivered to a gathering of central bankers in Sydney today.

"There remains considerable debate about the role of monetary policy in responding to risks to financial stability, Stevens wrote in the article entitled "Fifty Years of Monetary Policy: What Have We Learned?"

The "potential instability of a well-developed boom means that for policy makers the least-harm policy is to make sure that their settings are not inadvertently fueling the build- up," he said.

9. Euro crisis - The situation around the Euro and a potential bailout of Greece is reaching crisis levels. European Central Bank Chief Jean Claude Trichet left the Sydney conference early yesterday to attend an EU conference on Thursday that was supposed to be a regular one on economic reform but is now a full blown emergency meeting.

The reports overnight of a German-led bailout of Greece should be taken with a big grain of salt. The FT rightly points out the Germans are desperate not to bail out the whole of southern Europe. They want to create a firewall.

As the eurozone's dominant economy, Germany would be expected to take the lead in marshalling financial support for a Greek bail-out. There are fears the crisis could spread to other eurozone states with big deficits such as Spain and Portugal.

"We've had to face up to the fact that what is now a Greek problem could turn into a European one," the official said.

"We're thinking about what we should do if the crisis spills from Greece into other euro countries. So it's more about finding firewalls, containing the problem, than principally about helping the Greeks." He added there were "no concrete plans" as yet.

Here's Ed Harrison at Credit Writedowns explaining the German vibe on it all. They don't want to bail out Greece one little bit.

Many ordinary Germans feel their good money is now being trashed. They already had a currency union between Ostmark and Deutsche Mark, with Western Germans submitting to a "solidarity tax" in order to finance the upgrading of Eastern Germany's infrastructure. So, to this day, many German look at larger Euro notes to determine if they were printed by the Germans, Italians, or Greeks "“ sometimes rejecting notes printed in countries viewed with suspicion like Italy (see the Telegraph's 2008 story on this here)

With this as background, you should see the 2009 election of the CDU/CSU/FDP coalition as a signal that the German government is unlikely to submit to a bailout.  With the FDP replacing the SPD in government, the likelihood of a Greek bailout decreases. The FDP is the libertarian junior partner in this new coalition (the same coalition which produced the SGP, by the way) and they are under enormous pressure from their constituents not to permit any bailouts.  If Germany allows German tax dollars to go to the EU in order to bailout the profligacy of Italy or Greece, there would be riots.  Spain is another story "“ but Greece is known as fiscally profligate in Germany "“ so bailing them out is unacceptable politically. Let's not forget that Germany has it's own problems in banking as well.

10. Totally irrelevant video - Here's the Onion reporting on a worm that steals credit cards....

Insidious Worm Makes Unauthorized Purchases When Computer User Is Drunk